Press Release

American Equity Reports First Quarter 2017 Results

First quarter 2017 net income of $53.9 million or $0.60 per diluted
common share

First quarter 2017 non-GAAP operating income1
of $59.6 million or $0.66 per diluted common share

First quarter 2017 annuity sales of $1.1 billion, down 48% from
first quarter 2016

Policyholder funds under management of $46.0 billion, up 1.8% from
December 31, 2016 and 8.2% from March 31, 2016

First quarter 2017 investment spread of 2.71%

Estimated risk-based capital ratio of 353% compared to 342% at
December 31, 2016

WEST DES MOINES, Iowa--(BUSINESS WIRE)--May 3, 2017--
American Equity Investment Life Holding Company (NYSE: AEL), a leading
issuer of fixed index annuities, today reported first quarter 2017 net
income of $53.9 million, or $0.60 per diluted common share, compared to
net loss of $44.8 million, or $0.55 per diluted common share, for first
quarter 2016.

Non-GAAP operating income1 for the first quarter of 2017 was
$59.6 million, or $0.66 per diluted common share, compared to non-GAAP
operating income1 of $21.0 million, or $0.25 per diluted
common share, for first quarter 2016. On a trailing twelve month basis,
non-GAAP operating1 return on average equity1 was
8.6% based upon reported results and 11.2% excluding the impact of
assumption revisions in the third quarter of 2016.

POLICYHOLDER FUNDS UNDER MANAGEMENT UP 1.8% ON $1.1 BILLION OF SALES

Policyholder funds under management at March 31, 2017 were $46.0
billion, an $819 million or 1.8% increase from year-end 2016. First
quarter sales were $1.1 billion before coinsurance ceded and $1.0
billion after coinsurance ceded. Gross sales and net sales for the
quarter were down substantially from the record first quarter sales
posted in 2016. On a sequential basis, gross sales were down 22% with
net sales down 10%.

Commenting on sales, John Matovina, Chief Executive Officer and
President, said: "While sales were down substantially on a
year-over-year basis, we would note that first quarter 2016 sales
benefited from momentum we had coming off of a record second half of
2015 as well as elevated sales of multi-year guaranteed annuities
(MYGAs). The relatively smaller declines in net sales compared to gross
sales reflects both significantly lower volumes of MYGA products which
are substantially coinsured as well as a reduction in the portion of
Eagle Life's fixed indexed annuity (FIA) product sales that are
coinsured.

Total sales by independent agents for American Equity Investment Life
Insurance Company (American Equity Life) declined 18% sequentially while
total sales by broker-dealers and banks for Eagle Life declined by $99
million or 47% sequentially. Sales of FIAs were down 16% sequentially to
$1.0 billion with all of the decrease attributable to reduced sales for
American Equity Life."

Commenting on the competitive environment and the outlook for FIA sales,
Matovina added: “The market in each of our distribution channels was
quite competitive in the first quarter and we've not seen any indication
that the near term will be any less competitive. We continue to suspect
that uncertainty regarding the Department of Labor (DOL) conflict of
interest fiduciary rule may be distracting from marketing activities and
playing a role in lower sales. In some cases, registered representatives
may be positioning money away from annuities and into managed money in
anticipation of the fiduciary rule."

Matovina continued: "We have enhanced our competitive positioning by
adding an optional market value adjustment (MVA) feature to our Eagle
Select and American Equity Choice series of products. These products
accounted for approximately 20% of first quarter 2017 FIA sales but it
is too early to assess the impact from the MVA versions which have
higher rates than the comparable non-MVA versions. While 2017 FIA sales
are off to a slow start, we believe the long-term outlook for FIA sales
remains favorable driven by well understood demographic factors and the
potential for further increases in interest rates."

COST OF MONEY REDUCTION BENEFITS INVESTMENT SPREAD

American Equity’s investment spread was 2.71% for the first quarter of
2017 compared to 2.62% for the fourth quarter of 2016 and 2.65% for the
first quarter of 2016. On a sequential basis, the average yield on
invested assets increased approximately one basis point while the cost
of money declined eight basis points.

Average yield on invested assets continued to be unfavorably impacted by
the investment of new premiums and portfolio cash flows at rates below
the portfolio rate. The average yield on fixed income securities
purchased and commercial mortgage loans funded in the first quarter of
2017 was 4.13% compared to 3.71% and 4.14% in the fourth and first
quarters of 2016, respectively. However, the unfavorable impact from new
money investment yields was offset by fee income from bond transactions,
prepayment income and other non-trendable investment income items which
added ten basis points to the first quarter average yield on invested
assets compared to seven basis from such items in the fourth quarter of
2016.

The aggregate cost of money for annuity liabilities decreased by eight
basis points to 1.77% in the first quarter of 2017 compared to 1.85% in
the fourth quarter of 2016. This decrease primarily reflected continued
reductions in crediting rates. The benefit from over hedging the
obligations for index linked interest was five basis points in the first
quarter of 2017 compared to two basis points in the fourth quarter of
2016.

Commenting on investment spread, John Matovina said: “First quarter
spread results benefited from our fully invested profile, a five basis
point reduction in the cost of money attributable to new money rates and
reductions in renewal crediting rates, an increase in the over hedging
benefit, fee income from bond transactions and prepayment income, and
other recurring, but variable, investment income items. While investment
spread did increase on a sequential basis, yields available to us on
investments that meet our high quality parameters remain below our
portfolio rate and will continue to pressure our spread results. We will
continue to achieve reductions in our cost of money through renewal rate
adjustments that will be implemented on policy anniversary dates over
the remainder of this year. We continue to have flexibility to reduce
our crediting rates, if necessary, and could decrease our cost of money
by approximately 0.49% through further reductions in renewal rates to
guaranteed minimums should the investment yields currently available to
us persist."

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements within the
meaning of The Private Securities Litigation Reform Act of 1995.
Forward-looking statements relate to future operations, strategies,
financial results or other developments, and are subject to assumptions,
risks and uncertainties. Statements such as “guidance”, “expect”,
“anticipate”, “believe”, “goal”, “objective”, “target”, “may”, “should”,
“estimate”, “projects” or similar words as well as specific projections
of future results qualify as forward-looking statements. Factors that
may cause our actual results to differ materially from those
contemplated by these forward looking statements can be found in the
company’s Form 10-K filed with the Securities and Exchange Commission.
Forward-looking statements speak only as of the date the statement was
made and the company undertakes no obligation to update such
forward-looking statements. There can be no assurance that other factors
not currently anticipated by the Company will not materially and
adversely affect our results of operations. Investors are cautioned not
to place undue reliance on any forward-looking statements made by us or
on our behalf.

CONFERENCE CALL

American Equity will hold a conference call to discuss first quarter
2017 earnings on Thursday, May 4, 2017 at 8:00 a.m. CT. The conference
call will be webcast live on the Internet. Investors and interested
parties who wish to listen to the call on the Internet may do so at www.american-equity.com.

The call may also be accessed by telephone at 855-865-0606, passcode
99630301 (international callers, please dial 704-859-4382). An audio
replay will be available shortly after the call on AEL’s website. An
audio replay will also be available via telephone through May 11, 2017
at 855-859-2056, passcode 99630301 (international callers will need to
dial 404-537-3406).

ABOUT AMERICAN EQUITY

American Equity Investment Life Holding Company, through its
wholly-owned operating subsidiaries, issues fixed annuity and life
insurance products, with a primary emphasis on the sale of fixed index
and fixed rate annuities. American Equity Investment Life Holding
Company, a New York Stock Exchange Listed company (NYSE: AEL), is
headquartered in West Des Moines, Iowa. For more information, please
visit www.american-equity.com.

1

Use of non-GAAP financial measures is discussed in this release in
the tables that follow the text of the release.

Portion of OTTI losses recognized in (from) other comprehensive
income

(141

)

324

Net OTTI losses recognized in operations

(141

)

(5,694

)

Total revenues

927,301

417,604

Benefits and expenses:

Insurance policy benefits and change in future policy benefits

11,875

9,109

Interest sensitive and index product benefits

419,139

97,671

Amortization of deferred sales inducements

62,325

27,479

Change in fair value of embedded derivatives

224,170

265,857

Interest expense on notes and loan payable

7,722

6,880

Interest expense on subordinated debentures

3,336

3,168

Amortization of deferred policy acquisition costs

89,678

49,713

Other operating costs and expenses

27,579

26,830

Total benefits and expenses

845,824

486,707

Income (loss) before income taxes

81,477

(69,103

)

Income tax expense (benefit)

27,538

(24,262

)

Net income (loss)

$

53,939

$

(44,841

)

Earnings (loss) per common share

$

0.61

$

(0.55

)

Earnings (loss) per common share - assuming dilution

$

0.60

$

(0.55

)

Weighted average common shares outstanding (in thousands):

Earnings (loss) per common share

88,647

82,129

Earnings (loss) per common share - assuming dilution

89,976

82,961

NON-GAAP FINANCIAL MEASURES

In addition to net income (loss), the Company has consistently utilized
non-GAAP operating income and non-GAAP operating income per common share
- assuming dilution, non-GAAP financial measures commonly used in the
life insurance industry, as economic measures to evaluate its financial
performance. Non-GAAP operating income equals net income (loss) adjusted
to eliminate the impact of items that fluctuate from quarter to quarter
in a manner unrelated to core operations, and the Company believes
measures excluding their impact are useful in analyzing operating
trends. The most significant adjustments to arrive at non-GAAP operating
income eliminate the impact of fair value accounting for the Company's
fixed index annuity business and are not economic in nature but rather
impact the timing of reported results. The Company believes the combined
presentation and evaluation of non-GAAP operating income together with
net income (loss) provides information that may enhance an investor’s
understanding of its underlying results and profitability.

Reconciliation from Net Income (Loss) to
Non-GAAP Operating Income (Unaudited)

Adjustments to net income (loss) to arrive at non-GAAP operating
income are presented net of related adjustments to amortization of
deferred sales inducements (DSI) and deferred policy acquisition
costs (DAC) where applicable.

NON-GAAP FINANCIAL MEASURES

Average Stockholders' Equity and Return
on Average Equity (Unaudited)

Return on average equity measures how efficiently the Company
generates profits from the resources provided by its net assets.
Return on average equity is calculated by dividing net income and
non-GAAP operating income for the trailing twelve months by
average equity excluding average accumulated other comprehensive
income ("AOCI"). The Company excludes AOCI because AOCI fluctuates
from quarter to quarter due to unrealized changes in the fair
value of available for sale investments.

Twelve Months Ended

March 31, 2017

(Dollars in thousands)

Average Stockholders' Equity 1

Average equity including average AOCI

$

2,357,595

Average AOCI

(477,331

)

Average equity excluding average AOCI

$

1,880,264

Net income

$

182,023

Non-GAAP operating income

160,968

Return on Average Equity Excluding Average AOCI

Net income

9.68

%

Non-GAAP operating income

8.56

%

1 - The net proceeds received from the Company's settlement of the two
equity forward sales agreements in August 2016 are included in the
computations of average stockholders' equity on a weighted average basis
based upon the number of days they were available to the Company in the
twelve month period. The weighted average amount is added to the simple
average of (a) stockholders' equity at the beginning of the twelve month
period and (b) stockholders' equity at the end of the twelve month
period excluding the net proceeds received from the settlement of the
two equity forward sales agreements in August 2016.